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Goal Consensus, Subordinates’ Prior Performances, and Supervisors’ Resource Allocation Preferences

necessary senior salespersons. These findings are not surprising because branch managers
with more experience and branch offices that are already well-known by neighbors may
not need extra senior salespersons to handle complex job-related situations and cultivate
customer loyalty. As a regional manager must negotiate with branch managers to (re)

deploy senior salespersons, it is much more difficult for regional managers to adjust senior
salespersons in a region with more branch offices. We also find that branch offices with
more houses managed are positively and significantly related to Ab_ADV suggesting that
i,t
regional managers give more advertising funding to branch offices with more houses to
sell.

4.3 Additional Tests
4.3.1 Alternative Measure of Branch Office’s Prior Performance

In our main empirical analysis, we use the branch office’s prior sales revenues to
operationalize its performance. As indicated in Section 2.2, one responsibility of the
regional manager is ensuring that branch offices within his region achieve their required
performance (i.e., target sales revenues) and maximize the overall performance of the

branch offices within the region. Therefore, to further test the robustness of our results, we
consider whether the branch office achieved its target sales revenue in the previous month
as an alternative measurement of the office’s prior performance.
A dummy variable equals one if the branch office achieved its target sales revenues

in the previous month; otherwise it equals zero. Empirical results are similar to what we
find in Table 5 and present in Table 6. From Table 6, we observe that after we control for
factors that could affect the regional manager’s resource allocation decision, ACHIEVE
i,t-1
is positively and significantly related to Ab_SENIOR (t = 4.32, p < 0.01) but not Ab_
i,t
ADV (t = 1.60, p = 0.11). In addition, we also find that the product term of goal consensus
i,t
and the branch offices’ past performance is statistically insignificant in relation to either
Ab_SENIOR (t = -0.49, p = 0.62) or Ab_ADV (t = 1.15, p = 0.24).
i,t
i,t

4.3.2. Excluding Observations without Change in Allocation of Advertising Funding and
Senior Salespersons
To confirm our empirical results, we limit our focus to branch-monthly observations
that demonstrate changes in the allocation of advertising funding and senior salespersons

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